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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15306 / March 25, 1997
SECURITIES AND EXCHANGE COMMISSION v. JOHN C. LARRABEE AND JAMES
L. D'ANGELO, Civil Action No. 97 10652 (WGY) (D. Mass.)
The Securities and Exchange Commission announced today that
it filed a Complaint against John C. Larrabee ("Larrabee") of
Boxford, Massachusetts, and James L. D'Angelo ("D'Angelo") of
Wolfeboro, New Hampshire, charging them with insider trading
concerning the merger of Baybanks, Inc. ("Baybanks") and Bank of
Boston Corporation ("Bank of Boston"). The Commission's
Complaint alleges that D'Angelo, who was a stockbroker at the
Andover, Massachusetts branch office of PaineWebber Incorporated,
purchased common stock of Baybanks while in possession of
material nonpublic information about the impending acquisition,
and realized illegal profits of $86,750. The Complaint further
alleges that D'Angelo obtained the information in the form of a
"tip" from Larrabee, who was the Director of Fiduciary Services
at Bingham, Dana & Gould, a Boston law firm that represented Bank
of Boston in the acquisition. The case was filed in the United
States District Court for the District of Massachusetts and
charges D'Angelo and Larrabee with violations of Section 10(b) of
the Securities Exchange Act of 1934 ("Exchange Act") and Rule
10b-5 thereunder.
According to the Complaint, Larrabee misappropriated
material nonpublic information concerning the acquisition of
Baybanks by Bank of Boston, and "tipped" D'Angelo in breach of
his duty of confidentiality to Bingham, Dana & Gould and his
fiduciary duty to its client, Bank of Boston. The Complaint
alleges that on December 12, 1995, after receiving Larrabee's
tip, D'Angelo purchased 10,200 shares of Baybanks at $85 per
share for $867,000. The Complaint alleges that D'Angelo
purchased these shares in his own brokerage accounts and in
brokerage accounts that he controlled for his ex-wife, children,
grandchild and girlfriend. The Complaint alleges that this was
the first time that D'Angelo purchased Baybanks stock, and that
the purchase represented approximately 20% of the day's trading
volume of Baybanks stock. The Complaint alleges that the
following morning, D'Angelo sold his shares of Baybanks for a
profit of $86,750.
Simultaneously with the filing of the Complaint, D'Angelo
consented, without admitting or denying the allegations in the
Complaint, and pending final approval by the Court, to be
permanently enjoined from future violations of Section 10(b) of
the Exchange Act and Rule 10b-5 thereunder. D'Angelo agreed to
pay disgorgement of $86,750, plus prejudgment interest in the
amount of $8,552, and a civil penalty of $86,750, for a total of
$182,052.
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